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When global AI met India’s ambition
It was a big week for India as the world’s third-largest digital economy hosted the first-ever global AI summit held in the Global South. It came at a decisive moment, as India moved to cement its place at the forefront of the rapidly evolving global AI race. A major step towards that goal was the launch of five sovereign frontier models developed by Indian players such as Sarvam, Gnani.ai, BharatGen, Fractal, and Tech Mahindra. The India AI Impact Summit also set the stage for the country to project its ambitions and influence the global AI conversation. The scale of the event was unprecedented on several fronts: Participation from more than 20 heads of state and government representatives from 118 countries, along with over 100 global AI leaders. Tech and AI royalty was in full force including Sundar Pichai, Demis Hassabis, Sam Altman, Shantanu Narayen, Alexandr Wang, Yoshua Bengio, and Yann LeCun, alongside the Presidents of Brazil, France, and the Prime Minister of India. More than 5 lakh visitors, a turnout that also drew criticism over poor crowd management, traffic chaos and logistical confusion. Over $250 billion in investment pledges in the infra layer, and $20 billion in deep tech commitments. India also formally joined the US-led Pax Silica coalition, a strategic alliance focused on securing the semiconductor supply chain. In addition, a consensus on the New Delhi declaration is imminent, with signatories crossing 70 and set to reach 80 today. While details have not yet been made public, IT Minister Ashwini Vaishnaw said there was “huge consensus” on the text. When it came to global AI leaders, much of the commentary centered on AGI and superintelligence timelines, autonomous agents, and the associated risks. For Indian AI startups, however, the week was about planting their own flag in the global AI sweepstakes. It was about building models grounded in India and designed to solve the country’s unique challenges. We spent the past week on the ground at Bharat Mandapam in New Delhi, bringing you exclusive insights from some of the biggest global voices in Artificial Intelligence. We spoke to top minds at global tech giants, pioneering AI researchers, and investors. Here is a quick recap: Sam Altman, OpenAI OpenAI CEO Sam Altman said that there are 'incredible' small language AI models emerging in India at lower costs, referring to a series of sovereign AI models launched by companies like Sarvam, Gnani.ai, and BharatGen. He also noted that 'building energy in India is quite remarkable'. "I've never seen a total amount of energy relentlessly attacking a problem across the entire (AI) stack as anywhere but here," Altman said. P.S. Altman also addressed his awkward, now-viral exchange with Anthropic CEO Dario Amodei, which happened on stage during a group photo with Indian Prime Minister Narendra Modi. Vinod Khosla, Khosla Ventures Tech billionaire and venture capitalist Vinod Khosla said India’s IT services companies will need to reinvent themselves in a significant way by the end of the decade as AI reshapes the global technology landscape. He expressed hope that Infosys becomes a global AI services company. “I think India as an exporter of AI expertise and deployment is a massive opportunity,” he said. Khosla added that AI vibe coding startup Emergent is performing phenomenally well and is among the fastest growing companies he has ever seen. Emergent has seen its ARR double to $100 million in less than a month. Watch the interview. Yoshua Bengio, ‘Godfather of AI’ Yoshua Bengio, known as one of the “godfathers of AI”, said governments around the world are not doing enough to allay concerns people have around job losses. He also noted that Big tech companies are not investing enough in the risk management of AI at present. Bengio also said that countries such as India must build globally competitive AI systems rather than depending on adapting foreign models. Watch the interview. Jimmy Wales, Wikipedia Wikipedia co-founder Jimmy Wales said that India is 'very well poised' to harness AI and thrive in this era. He also dismissed any competition between Wikipedia and Elon Musk’s Grokipedia. "I think it’s a ridiculous idea (Grokipedia), and it will never work," he said. Watch the interview. Mati Staniszewski, ElevenLabs ElevenLabs co-founder Mati Staniszewski spoke about why India is important to the voice AI company and outlined their plans to open an office in Bengaluru. Addressing competition from homegrown player Sarvam, Staniszewski acknowledged that the company has a "great team with incredible founders" and praised the model's voice quality. However, he noted that a complete solution requires both the best models and the best product. Read the interview (Or watch the video) Amjad Masad, Replit Replit co-founder Amjad Masad spoke to us exclusively about the AI coding race, fears of software job displacement, and whether a funding bubble is forming in vibe coding. "Two kids in India can build and compete with Salesforce. It wasn’t possible even a year ago," he said. With the US becoming more restrictive on immigration, India is also the top choice for Replit's international expansion, Masad added. Read the interview. Mustafa Furniturewala, Coursera India has emerged as the global leader in Generative AI enrolments on Coursera, clocking over 4 million enrolments and recording nearly three sign-ups per minute, said Chief Technology Officer Mustafa Furniturewala. India’s young workforce is driving rapid upskilling as AI reshapes coding and the software development lifecycle, he said. Pratyush Kumar, Sarvam Sarvam co-founder Pratyush Kumar said the government’s grant under the IndiaAI Mission, provided in lieu of a stake, played a crucial role in training the company’s large language models. However, he emphasised that the startup does not intend to “mindlessly” scale model sizes. He also pushed back against the idea that India should limit itself to smaller systems. “We should not be bucketing India into saying small language model country. We should build all kinds of things that bring real business value,” he said. Kumar also spoke about overcoming skepticism, Sarvam’s ambition of ensuring AI reaches everyone in India, and why the country’s AI journey must be defined by long-term conviction rather than short-term hype. Watch the interview. Roy Jakobs, Philips Philips Global CEO Roy Jakobs said AI in healthcare is no longer a futuristic promise but is already transforming clinical practice. He noted that India plays a critical role in Philips’ strategy, offering a unique combination of high healthcare demand and deep engineering talent. Jakobs added that the company sees India as both a development hub and a launchpad for global AI applications. What else shaped the India AI Impact Summit Prime Minister Narendra Modi called on innovators to design and develop in India and deliver solutions to the world and humanity. He also presented what he called India's "MANAV" vision for AI. Here are the 5 big takeaways. India’s signing of the Pax Silica agreement with the United States will help the country build advanced tech through enhanced access to technologies, IT secretary S Krishnan told us. India has the momentum in AI adoption with affordable innovation emerging from domestic players, Zoho founder Sridhar Vembu told us. “I believe the IT services industry can flourish if they rapidly deploy AI tools,” he said. Yann LeCun, widely regarded as one of the godfathers of AI, believes there is another AI revolution coming, but it's not AGI and it's not arriving next year. He also criticised the AI industry, particularly Silicon Valley, for being entirely focused on LLMs. India has a rare opportunity to emerge as a “full-stack” player in AI, not only as a massive user base but also as a builder and shaper of the technology, said Google CEO Sundar Pichai. He also noted that the world cannot afford to let the digital divide morph into an 'AI divide'. Google DeepMind CEO Demis Hassabis said today's AI systems are impressive but they still have many flaws, with consistency being a crucial one. “They are like jagged intelligence. They are very good at certain things, but they are very poor at other things, including sometimes the same thing,” he said. India can possibly achieve 20-25% growth if adoption of AI succeeds in the country, said Anthropic CEO Dario Amodei. Global frontier AI companies and Indian innovators have “committed” to publishing anonymised data on how their tools are used in the real world and to systematically testing their models across languages and cultural contexts under the newly unveiled voluntary framework “New Delhi Frontier AI Impact Commitments”. French President Emmanuel Macron gave a big thumbs up to India’s small language model strategy and the country’s digital leap. Meta’s Chief AI Officer Alexandr Wang said the company is focused on embedding AI into everyday life in India, unveiling upcoming models and outlining a vision for personalised superintelligence. Reliance Industries chairman Mukesh Ambani outlined the company’s Rs 10-lakh-crore plans to fuel India's AI growth. At a time when global markets are rattled by claims that AI could render traditional software and services obsolete, the chief executives of India’s three largest IT services firms struck a resolutely confident note, arguing that AI will expand opportunity rather than shrink it. India’s biggest AI opportunity will emerge in the application layer rather than in building large foundation models, according to Bejul Somaia, Managing Director at Lightspeed Venture Partners. India holds a significant advantage in shaping the next wave of AI, said Mistral AI’s Arthur Mensch, pointing to the country’s talent base, market scale, and cultural diversity as critical enablers. He said that a quarter of their researchers are Indian. AI disruption will be a blessing in disguise for core engineers, IIT-Madras Director V Kamakoti told us in an interview. He said it will correct years of talent drift away from core engineering by pushing graduates back into disciplines such as civil, mechanical, and electrical engineering. A look at how Zepto plugged into India AI Impact Summit with a compact dark store. It processed over 1,700 orders in a single day despite limited hours. Watch the interview. (P.S. Watch our video interviews from India AI Impact Summit) Was this newsletter forwarded to you? You can sign up for the AI Edge here. And don’t forget to sign up to Tech3, our daily newsletter that breaks down the biggest tech and startup stories every weekday evening.
February 21, 2026
App jaisa koi nahi
This Valentine’s Day, we’re diving into India's surging obsession with AI companions. These aren’t just bots; they’re digital confidants providing a level of intimacy social media never could. By delivering instant emotional relief and hyper-immersive conversation, these apps don’t just engage users for longer, they keep them coming back for more. A friend in need: The conversations are “leading on” and can “turn problematic” very quickly, a large investor told us. “It’s like my wife doesn’t talk to me that flirtatiously,” he said. There are at least a dozen AI companion apps at play in India. This includes Rumik, Puch AI, Rivi, Samvaad, Bezu AI, QuickSmart AI, Kavana, Hootz, Hanabot, Kognitech AI Solutions, Meko, Liznr and Replican, among others. The goal of these platforms is simple: keep users engaged and hooked for longer by sounding less like a machine and more human. They offer immersive experiences like watching YouTube together or even playing a game of chess to reduce the distance between the two sides The target group: These apps are built to focus more on Hinglish speaking users residing in non-metro regions and the ones who have migrated to metro cities. “Settling in immediately can be difficult – connections need to be built up, which is where AI companions step in and ease the process quite significantly,” said Ishaan Khosla, Partner, Huddle Ventures. Gig workers, the ones who deliver our food and groceries, are a key target group too. The nature of these conversations shift depending on what time of the day it is. “Late nights and early mornings are usually heavy traffic times on these platforms,” an investor said as he highlighted loneliness is at its peak during these times. . Easy monetisation: Users are initially teased with a limited version of these apps but conversations are so immersive that they do not want to drop off. Once that cap is hit, the platform prompts users to subscribe – making the path to monetisation almost seamless The membership fee is also modest — just Rs 99/month in some cases – so users don’t feel the pinch But thanks to millions in downloads, these micro transactions result in serious money. UPI Autopay mandates ensure the cash registers keep ringing at these platforms A blessing in disguise: While such platforms are addictive, Munia Bhattacharya, a doctor and Senior Consultant - Clinical Psychology, Mental Health and Behavioural Sciences at Marengo Asia Hospital said such platforms can often be the first line of response. AI companion tools can provide immediate emotional relief in moments of distress, especially when no one else is around, she told us. Yet even bullish backers concede that growth needs guardrails. The challenge now isn't just scaling faster, but ensuring the rush for personalisation and profits doesn't outpace responsibility. Read the full story Was this newsletter forwarded to you? You can sign up for the AI Edge here. And don’t forget to sign up to Tech3, our daily newsletter that breaks down the biggest tech and startup stories every weekday evening.
February 14, 2026
Travel’s new front desk? It’s AI
A solo trip was calling, and Goa felt like the obvious answer, but planning it alone meant fewer suggestions and no second opinions. That is when Myra stepped in, recommending quieter beaches, smart experiences and options that neatly fit my budget. Myra, by the way, is not a well-meaning friend or a travel buff. She is MakeMyTrip's AI chatbot. In that short exchange with Myra, I caught a glimpse of a larger shift underway, one where artificial intelligence is quietly transforming how travellers across India plan trips, make bookings and get support. AI flying high According to MakeMyTrip co-founder and group CEO Rajesh Magow, AI is now embedded across multiple customer touchpoints: Trip planning & discovery: It helps users who don’t know where to go but know what vibe they want. Uses conversational flows to recommend destinations and itineraries. Flights & logistics: Resolves queries around layovers, transit visas and baggage allowances. Hotels: Generates two-line summaries of reviews from travellers with similar profiles. Customer support: Identifies intent, suggests next actions and summarises calls before tickets are closed. Adoption is strongest beyond metros: Over 50,000 AI-led conversations daily now come from Tier II cities More than 45% of total usage is from non-metro regions Voice-led interactions are significantly higher. As Magow puts it, for many users, speaking feels more natural than typing. Why travel platforms are betting big on AI Cost efficiency is a major driver. At Yatra, AI is helping teams scale without expanding headcount. Automation of routine tasks has freed up employees to focus on higher-value work, improving efficiency and profitability. Thrillophilia has taken this a step further with an AI sales co-pilot: Analyses customer behaviour and conversations Scores leads dynamically based on intent Routes high-intent leads to humans, low-intent ones to AI Triggers nudges instead of calls when follow-ups aren’t worthwhile With industry-wide conversion rates hovering around 5%, every lead is expensive. The AI system has already doubled salesperson productivity in six months, with a goal to make teams five times more productive—without adding headcount. The result: higher revenue, same team size. How AI is being deployed under the hood Travel platforms are now using AI far beyond chat: Expense management (Yatra RECAP): Vision analytics detect fraud and duplicate receipts and voice-enabled AI allows users to log expenses verbally. Agentic AI bots: Handle end-to-end tasks like bookings, cancellations, vouchers and invoices AI itinerary builders (Thrillophilia): Create personalised plans using traveller profiles, weather, availability and past behaviour AI travel diaries Are travellers comfortable with AI? The answer increasingly looks like yes ixigo reported 3.81 million customer queries handled by AI in a single quarter. During peak flight disruption in December of 2025, AI handled up to 90% of calls Yatra’s DIYA chatbot has seen 10–15% month-on-month user growth, resolving most queries without human support Cleartrip reports strong adoption among Gen Z and digitally savvy travellers Corporate travel players like ATPI are seeing AI move from pilot to daily operations, sharply improving compliance and adoption Also Read: How ixigo's decade-old AI bet paid off during Indigo crisis The big takeaway AI is no longer an experiment in travel, it’s infrastructure. From discovery to bookings, sales to support, platforms are using AI to cut costs, boost productivity and deliver faster, more personalised experiences. The result is a leaner, smarter travel business—where humans focus on high-intent moments, and machines handle the rest. Read the full storyWas this newsletter forwarded to you? You can sign up for the AI Edge here. And don’t forget to sign up to Tech3, our daily newsletter that breaks down the biggest tech and startup stories every weekday evening.
February 7, 2026
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6 things the Economic Survey says about India’s AI future
The Economic Survey 2025-26 is blunt about one thing: India’s AI moment will not be decided by who builds the biggest model. It will be decided by who manages constraints better. Constraints around compute, power, talent, jobs and capital run through the AI chapter, tying together what might otherwise look like disconnected policy debates. Seen together, the Survey reads less like a tech vision and more like an operating manual for doing AI in a resource-constrained economy. Here is what stood out. 1. AI compute: Where ambition meets reality Reality, the Survey notes, is that AI compute is becoming harder and more expensive to secure. Global shortages of GPUs, high-bandwidth memory, and storage are pushing up costs and limiting availability. Availability, rather than funding appetite, could become the binding constraint for India’s data centre and AI expansion plans. The Survey does not see financing as the main bottleneck, that arises when capital, power infrastructure, and hardware access fail to move in sync. Sync failures, it warns, can stall AI capacity creation even when demand and funding are strong. Read more 2. Why the government is stress-testing, not predicting Predicting AI capacity needs is a losing game, the Survey argues. Game-changing technologies evolve too fast. Instead, it proposes stress-testing how financing, electricity and hardware interact, to surface coordination failures early and guide policy intervention where it matters most. Constraint shifts from machines to people when the Survey turns to talent. Talent gaps, especially in hands-on experience with large models, risk holding India back more than compute shortages. Unless training starts earlier and is aligned with industry needs rather than confined to elite or late-stage programmes. Read more 3. Applications over frontier LLM races The race to build frontier models dominate global AI headlines, but the Survey is sceptical of their relevance for India. India’s edge lies in application-led AI built on domestic data, small models and sector-specific use cases. Those that work on existing hardware and scale across millions of users matter more than scale for its own sake. Leverage, in this strategy, comes from open systems. Open-source and open-weight models lower entry barriers and allow a broader set of startups, researchers and public institutions to participate. Infrastructure thinking runs deep in the Survey, enough for it to float an ‘AI-OS’ idea, pooling datasets, compute, and open-source efforts much like earlier digital public goods. (Think UPI or Aadhaar!). Read more. Also read: Why India’s GenAI rush creates 13x more startups, while funding rises just 1.6x 4. Jobs: The apocalypse hasn’t arrived, but neither has clarity That said, clarity is still missing on AI’s labour impact. Early evidence suggests no mass job destruction yet, offering short-term comfort. Comfort, however, is not a strategy especially in a labour-abundant economy, the Survey cautions. Talk turns darker when the Survey flags an ‘AI debt bomb’. Bomb here refers to highly leveraged AI infrastructure financed off balance sheets. If stress-tested by slowing demand or geopolitics, it could trigger a financial shock with spillovers far beyond tech. 5. AI Economic Council Transition management is why the Survey proposes an AI Economic Council. The Council would focus less on regulation and more on adoption, aligning AI with jobs and skills, and slowing down where necessary. This is necessary because speed without readiness can be destabilising. Read more 6. GCCs: A quiet stabiliser Closer to home, stability comes from services and global capability centres (GCCs). These captives are emerging as a key lever in embedding AI into enterprises. Enterprises, however, do not automatically translate services growth into broader institutional upgrades, the Survey warned. Read more. The bottom line The Economic Survey resists AI hype but gives way to a colder assessment: India’s AI future is not about racing ahead, but about not tripping over its own constraints. Constraints if managed well, may turn out to be the country’s biggest advantage. Two sentences from the Survey summarise the scenario well: “These asymmetries do not imply that India is at a structural disadvantage in the AI era. Instead, they define the constraints within which a viable and sustainable AI strategy must be formulated.” Was this newsletter forwarded to you? You can sign up for the AI Edge here. And don’t forget to sign up to Tech3, our daily newsletter that breaks down the biggest tech and startup stories every weekday evening.
January 31, 2026
Davos 2026: What top global AI voices told us
We spent the past week on the ground at the World Economic Forum in Davos, bringing you exclusive insights from some of the biggest global voices in Artificial Intelligence. We spoke to top minds at global tech giants, pioneering AI researchers, investors, and leaders at AI infrastructure companies and major IT services firms (including the biggest voice in Davos 2026). Here is a quick recap: Andrew Ng, AI pioneer Andrew Ng, one of the leading global AI voices, advised India to look beyond building fully sovereign AI systems and embrace open source, arguing it offers better protection than sovereignty alone. He dismissed fears of widespread AI job losses, pinning recent tech layoffs on overhiring. Ng, who started and led the Google Brain team until December 2012, acknowledged Google's current momentum on the back of the powerful Gemini 3 model, but noted that the entire AI landscape is currently 'white hot', presenting an opportunity for Anthropics, the OpenAIs, and many others of the world to play a big role in it. He also didn't mince words, warning that United States becoming less immigrant-friendly is a "huge unforced error" Ng, the founder of DeepLearning.AI, managing general partner at AI Fund and co-founder of Coursera, also weighed in on the elephant in the room: Are we in an AI bubble or not? Read the full interview (Watch the video) Andrew Bosworth, Meta Meta CTO Andrew Bosworth called India a "hugely important' market for the social media giant’s wearable and AI device strategy, due to a massive demand. India is Meta's largest user market with a combined user base of over a billion monthly users. But it also presents complex challenges, he noted. Meta has doubled down on smart glasses, which have emerged as a surprise hit for the social media giant. Bosworth however noted that AI glasses won't be the only form factor available and the company is "prototyping every kind of crazy idea you can imagine." Go deeper. Joel Kaplan, Meta Meta's chief global affairs officer Joel Kaplan praised India's pro-innovation approach to AI regulation. He noted that the government recognises how valuable tech innovations are for entrepreneurs and small businesses, which reflects in the general approach the government has adopted so far. Kaplan told us in an interview that the application layer is the right place for India to make the investment since the scale of investment to build foundation models is quite significant. “I am not sure it's the best allocation of taxpayer resources or capital," he said. Read more. Demis Hassabis, Google DeepMind Google DeepMind CEO Demis Hassabis echoed a similar view, suggesting that with enough foundation model providers already in play, India should focus on applied AI and partnerships. Hassabis also noted that India is a very important market for the tech giant, since a lot of DeepMind research happens in the country's Bengaluru office. India is also Google's largest market in terms of user base for its products and a crucial region for the growth of its AI efforts. "Indians love AI and they love using it. I think it's going to be a great technology for India economically," he said. Read more. Andrew Feldman, Cerebras Cerebras CEO Andrew Feldman emphasised that India’s talent, infrastructure push and partnership ecosystem make it impossible for global AI companies to ignore the country. “As a market, as a place to partner, as a place to deploy gear, I think one would be a fool to overlook India,” he said. Feldman also noted that Nvidia’s dominance is being challenged as fast inference reshapes the AI chip market. He cited Nvidia’s acquisition of Groq for a reported $20 billion as proof of this transition. In an interview with us, he also spoke about the growing importance of India in the global AI ecosystem, and the debate around an AI bubble. Read the full interview (Watch the video) Nick Tzitzon, ServiceNow ServiceNow vice-chairman Nick Tzitzon described India as a serious centre of gravity for enterprise AI adoption and execution. “India is our pride and joy,” he said, pointing to the company’s international development centre in Hyderabad, where teams are building some of the most innovative products. Calling it “the India century,” Tzitzon said he sees an explosion of energy and innovation across the country, including in Delhi, Hyderabad, Bangalore, and Mumbai. He also noted that enterprises are moving past AI’s early experimentation phase and are now asking for measurable outcomes. Find out more. Nigel Vaz, Publicis Sapient Publicis Sapient CEO Nigel Vaz shared a similar view, saying that companies have moved out of the experimentation phase. “Last year was about proof of concept. Now, it’s about tying AI to real workflow transformation and business outcomes.” he told us. He noted, however, that the real bottleneck is often not the technology but the foundations beneath it, with legacy data and tech debt hindering meaningful deployment. Read more. Raj Ganguly, B Capital B Capital, managing over $9 billion in assets globally, will do more deals in the AI and AI services space in India this year, co-founder Raj Ganguly told us in an interview. While acknowledging the strides made by India’s startup ecosystem through domestic IPOs, Ganguly stressed the need for more liquidity events. “IPOs can only do so much. We need to see more M&As, we need to see more secondaries. The maturing of the Indian venture capital ecosystem will lead to more liquidity coming in,” he told us. Read more Paolo Dal Cin, Accenture Accenture is setting up a new lab in Bengaluru focused on security for physical AI and robotics, the company’s Global Lead for Cybersecurity, Paolo Dal Cin, told us in an interview. Accenture’s cybersecurity business is worth $10 billion, with around 30,000 security professionals worldwide. Of these, 13,000 are based in India, highlighting the scale of India’s role in Accenture’s cyber practice. Find out more. Cedric Neike, Siemens Siemens AG’s Cedric Neike argued that if India scales manufacturing for AI data centres, it could be a huge opportunity. He believes India is at an inflection point in manufacturing linked to AI. Industrial AI is becoming central across sectors, driven by both supply chain disruptions and the need for more efficiency amid global talent shortages, he said. Read more More from our Davos coverage: All major global technology players want to have a big presence in India, says Ashwini Vaishnaw Indian IT is not lagging in AI, says Wipro chairman Rishad Premji ‘India is a phenomenal market’, SAP’s Thomas Saueressig plans more campuses in the country Many CEOs today don’t know what to do next: PwC Global Chairman Mohamed Kande as AI, Trump tariffs uncertainty looms India is our second-largest enterprise market as RoI drives adoption, says ElevenLabs Bajaj General Insurance resolves 95% of customer grievances with Gen AI, says CEO Tapan Singhel (Prefer video? Watch our Davos 2026 interviews) Was this newsletter forwarded to you? You can sign up for the AI Edge here. And don’t forget to sign up to Tech3, our daily newsletter that breaks down the biggest tech and startup stories every weekday evening.
January 24, 2026
AI shines in a dull quarter for Indian IT giants
Indian IT's December quarter was muted. Discretionary tech spends remained cautious, large deals were lumpy, and growth stayed measured. But one theme cut through the dullness: AI is no longer framed as experimentation, but as execution. A quiet shift: PoCs to RoI-led deployments TCS CEO K Krithivasan summed up what changed in 2025. “If you look at the AI revenues, the growth is coming from across verticals, and these are business-impacting programs that we are delivering for our customers… we have now shifted from experiment PoCs (Proof of Concepts) and pilots to really RoI (Return on Investment)- led, scaled implementations.” This signals a real transition. AI is moving out of labs and into production programmes that can be priced, delivered, and expanded. The slope that matters: AI is growing faster than the base business TCS’ annualised AI revenue jumped 17.3% sequentially to $1.8 billion, far ahead of its overall 1.96% growth for the December quarter. In a slow quarter, that delta is the story. AI is behaving like a different engine, even while the core business remains cautious.Also read: IT moves beyond agentic AI as Wipro, others bet on autonomous, quantum-led systems for 2026 The confidence lever Infosys CEO Salil Parekh tied AI positioning directly to forward visibility. “The way we have become the AI partner of choice with our largest clients, we see a good outlook… and that's in part helped us to increase the guidance.” Infosys, HCLTech, and Wipro have either revised or raised revenue guidance this quarter. While TCS and Tech Mahindra do not provide guidance, their management commentary is betting big time on AI. To be sure, guidance is still sub-5% and the sector is not out of the woods. But it is hard to miss what AI is doing: it is keeping the outlook from slipping further. The mix shift explains the obsession The revenue mix from AI, cloud and advanced digital services has risen from about 25% five years ago to nearly 60% today, data shared by Quess Corp to us shows. This is why AI dominates the narrative. It is not a side theme anymore but is becoming the core layer of what Indian IT sells. Wipro CEO Srinivas Pallia captured the boardroom shift best: AI is now a “standing board-level mandate led by CEOs” who see it as a lever to “unlock productivity” and create lasting competitive advantage. The confusing bit: AI is everywhere, but “pure-play AI” is still small Tech advisory and research firm UnearthInsight estimates pure-play AI revenues remain under 5-6% of overall IT services revenue. Even TCS’ $1.8 billion against a $30 billion base implies around 6%. That does not mean weak demand. It means AI is being embedded into broader deals across application development, testing, operations and managed services. Another tech advisory and research firm NelsonHall believes AI will be discussed less as a separate revenue bucket and more as a productivity and margin driver embedded in core services. Also read: Five years of Techade: AI lifts productivity, caps headcount, reshapes IT cost structures The bottom line: AI is why the quarter didn’t look worse This was not a great quarter for Indian IT, but AI made it look better than it should have. TCS has AI scaling faster than its base growth. Infosys is using AI positioning to defend forward visibility. HCLTech is carving out monetisable “advanced AI”. Wipro is framing AI as a CEO mandate. The shift is now visible as AI is no longer a promise but is becoming the execution layer.Read the full story
January 17, 2026
India’s AI Edge…
2026 will be a crucial year for India's AI ambitions as it aims to become a leader in the global AI race. A major step towards this goal will be the launch of the country's own indigenous foundation models developed by Indian startups. The government hopes to unveil these models at the India AI Impact Summit from February 15 to 20. In an exclusive conversation with Moneycontrol, S Krishnan, Secretary at the Ministry of Electronics and Information Technology, said the government is signalling a deliberate shift away from headline-grabbing investment pledges towards something more grounded: outcomes, adoption and inclusion. In a wide-ranging interview, Krishnan made it clear that the summit is not designed as an investor roadshow or a forum for grand commitments. Instead, its ambition lies in shaping shared priorities through leaders' declarations, working group outputs, and practical demonstrations of how AI can be deployed responsibly and at scale. Here are some excerpts: Outcomes the government is expecting from the summit First and foremost, of course, are the usual things in terms of a leaders' declaration and so on, which covers broadly, a much broader understanding of what is happening on a range of things in this space. The second part of it is actually to demonstrate to the world what India actually can bring to the table and what is it that India has that can be shown to the world. I think the PM mentioned this on Thursday to a group of innovators about frugal innovation -- that at a much lower cost, we would be able to do a lot more with a technology like AI. The second part of it is how it can act as an overlay on things like DPI and so on. So there's an inclusion aspect. And what is the kind of work that has already happened in India, which we can showcase for adoption, not just in India, but elsewhere in the world. Readiness of indigenous foundation models Sarvam will hopefully be ready by then. One or two more also we hope will be ready. Striking a balance in AI dialogue with other countries The diversity of approach helps. Because then you have experimentation with different approaches, you know what's worked, what's not worked, you can learn from each other's examples, you approach and see problems in different ways. The objective situation which you find yourself in may be very different. For many Western countries since AI basically replaces cognitive work, their concern would be very different from the kind of concern that India would have. So, the situation from which they approach it would be different. The situation from which we approach it is different. So, you learn from each other. I think that's where we find middle ground. Because nobody thinks identically on an issue, there are separate interests. So, you have to then see where is it that you can have some commonality of interest so that you can go for it. What startups attending the summit can look for For startups, the real opportunity is to actually showcase the kind of solutions that they have built and then figure out, where is it that they can find markets, where is it that they can find other partners and other stakeholders with whom they can work. Read the full interview
January 10, 2026
AI Edge Rewind 2025 | The year India stopped talking about AI and started building it
In 2025, artificial intelligence stopped being a future story for India and became an infrastructure one. From billion-dollar AI data centres and mounting power constraints to free AI bundles, trillion-parameter ambitions, regulatory pushback and a quiet rewrite of Indian IT, the year revealed how deeply AI is embedding itself into the country’s economy and governance. In this year-end edition of AI Edge, we bring together the top stories that shaped India’s AI moment in 2025… the bets, the bottlenecks, and the debates that will define what comes next. 1. The great Indian AI data centre boom India is fast becoming the world’s data centre hub. From being the biggest market for tech talent to now the region for userbase farming – global tech and AI giants took notice in 2025. Microsoft is investing $17.5 billion to build AI and cloud infrastructure. Google announced a $15-billion gigawatt-scale AI data centre campus in Vizag TCS is investing around $6.5 billion over the next 5-7 years to build 1 GW data centre capacity; Reliance Industries is starting a $11 billion data centre joint venture, among others The opportunity is stark: India generates nearly 20% of the world’s data but hosts just 3% of global data centre capacity. That gap is opening the door for large-scale investments from US tech majors. State governments, meanwhile, are racing to cash in these investments—rolling out dedicated policies, incentives and discounted land parcels to secure a share of the data centre boom. We unpack what goes into building an AI data centre. 2. India’s AI boom meets power reality India’s AI ambitions are scaling at breakneck speed, but so is its appetite for power. From Google’s $15-billion, gigawatt-scale AI campus in Visakhapatnam to IndiaAI Mission’s fast-expanding GPU clusters, the country’s push for sovereign AI is colliding with hard constraints around electricity, cooling, water and climate As electricity demand surges and sustainability concerns rise, India’s AI moment is increasingly defined by how it powers its machines—not just how fast it builds them. Find out more 3. Who really wins from free AI? What began as generous “free” AI subscriptions from Perplexity-Airtel, Google-Jio and OpenAI is fast turning into a deeper debate about data, consent and digital sovereignty. As millions of Indians gain access to premium AI tools, experts warn that global tech firms may be quietly harvesting multilingual, culturally rich Indian data to train their models, only to sell those products back at scale With India’s data protection rules still rolling out, the rush of AI-telco bundles raises uncomfortable questions: are users truly giving informed consent, who is liable when data flows abroad, and is India fuelling a new form of “neo-colonisation” in the age of artificial intelligence? Find out more 4. How Google flipped the AI script in 2025 At the beginning of 2025, it almost seemed like Google was losing the AI race to nimbler rivals. A shaky start to the generative era left critics calling it slow, defensive, and behind the curve. It was also facing a threat of a breakup by the US government. Fast forward to today and the narrative has flipped. Not only is the tech giant still in one piece, but it has mounted a strong comeback this year. From powerful frontier models like Gemini 3 topping major AI benchmarks, breakout products like NotebookLM and Flow, and headline-grabbing features like Nano Banana image generation and Veo 3 video creation that suddenly everyone is talking about, Google is finally playing offence How did Google put the pieces together for its comeback and engineer its AI resurgence? It all stems from the company's full-stack AI strategy, long-term bets finally paying off, its pre-training and post-training prowess, and the comeback of co-founder Sergey Brin. Read our deep dive 5. Market doubts rise, AI spending doesn’t As US markets wobbled on fears of an AI bubble, a three-way partnership between Microsoft, Nvidia and Anthropic showed that the world’s most powerful tech firms are still betting billions on artificial intelligence. From $30 billion in cloud commitments to chip, model co-design and deeper financial ties, the deal captures AI’s emerging “circular economy,” where cloud giants, chipmakers and model builders are increasingly locked together Whether this heavy spending marks the foundation of the next computing era or a risky leap ahead of monetisation is one of the defining questions of the year in AI. More on that here 6. AI builders will shape future geopolitics, says Yoshua Bengio Countries that invest in building their own AI systems will gain a geopolitical advantage in the future, Yoshua Bengio, widely regarded as one of the godfathers of artificial intelligence, told us in an interview at the World Economic Forum in Davos earlier this year. Bengio urged governments to incentivise for-profit companies to work on AI safety He also said that existing global safety nets will not be sufficient to address major labour market disruptions caused by artificial intelligence systems. 7. AI’s ouroboros moment As 2025 closes, AI finds itself in an uneasy loop, training on the very content it creates. With AI-generated text flooding the web, researchers warn of “model collapse”, where systems lose accuracy, originality, and human nuance by learning too much from synthetic data From global labs debating watermarks and provenance tagging to Indian startups racing to curate clean, human-made datasets under the IndiaAI Mission, the year revealed a central tension: scale versus authenticity. Go deeper 8. Inside BharatGen’s 1 trillion parameter AI model It may be a trillion-parameter model, but it is designed to shrink. After securing approval from the IT ministry to develop a one-trillion-parameter AI model, Bharat Gen's EVP Rishi Bal told us that the organisation plans to distil the system into domain-specific models for law, agriculture and finance. Rishi described the mega-model as a “mother system” that will enable the creation of lightweight applications, such as legal assistants or farm advisory tools, in regional languages To build India-specific datasets, the not-for-profit plans to partner with publishers to digitise archives, crowdsource annotators, and undertake similar efforts. 9. India works on global AI safety benchmarks India has made key contributions over the years to the global AI policy dialogue—through platforms such as the Global Partnership on Artificial Intelligence and the G20—and aims to carry that tradition forward at the upcoming IndiaAI Impact Summit 2026. The government is working on an AI Safety Commons, which will essentially be a repository of AI use cases for the Global South; benchmarking and evaluation parameters for AI developers and so on, IIT Madras professor Balaraman Ravindran told us 10. India’s 2-year journey to deepfake regulation From the 2023 Rashmika Mandanna controversy to October 2025, it has been a long journey toward India’s first deepfake regulation. A couple of months ago, the Indian government introduced draft amendments to the IT Rules, 2021, proposing additional compliance requirements for creators generating and platforms hosting “synthetically generated information” However, the move has drawn criticism from various quarters, with many calling for a relook at the scope of the proposed amendments. Critics argue that the draft, in its present form, targets not just the harmful uses of AI—such as deepfakes—but also legitimate creative avenues. 11. AI funding in overdrive In the world of dealmaking and AI, Emergent, the vibe coding platform founded by former Dunzo co-founder Mukund Jha, has emerged as one of the hottest companies around. Sources told us that Emergent is raising over $60 million from Khosla Ventures and SoftBank, as it compounds at breakneck speed This came months after we reported that over a dozen AI startups were negotiating new rounds with Peak XV Partners, Elevation Capital and others…And weeks after, we heard that more than half a dozen AI firms were preparing to raise from Accel, Prosus and others. 12. AI in Indian fintech and broking, with limits From broking platforms to fintech startups, AI is steadily moving closer to India’s financial decision-making stack, but always with guardrails on. Firms are using AI to analyse portfolios, personalise insights, automate operations and improve customer interfaces, while stopping short of stock-picking, unsupervised advice or full autonomy Amid regulatory scrutiny and trust concerns, AI is emerging less as a disruptive shortcut and more as a careful upgrade, turning hype into function without crossing lines regulators are not ready to redraw. Unpacking this here. 13. AI labelling mandate testing content creators This year, the Indian government said that content created using AI must be disclosed with a label—a rule that is now tripping up creators. Navigating a new maze of regulations, creators say the labelling requirement is disrupting workflows, increasing operational costs, and raising fears that their content could be misinterpreted as false or unreliable. AI labels that cover up to 10% of the screen are also slowing brand activity Influencer marketing agencies are now building internal checklists, with every Reel required to go through an “AI touchpoint review” to assess whether voices, visuals, backgrounds, or transitions involve generative tools. 14. Indian AI developers draw global giants India's booming AI developer community attracted prominent global AI players like OpenAI and Anthropic, who are setting up local offices and expanding operations to leverage the country's vast talent pool and accelerate the adoption of their offerings. These moves come amid intensifying rivalry with tech giants such as Google, Microsoft and Meta, all of whom are investing heavily to tap into one of the world's largest developer bases OpenAI's Srinivas Narayanan spoke to us about making the company's offerings more affordable for developers in India and how its ecosystem is designed to attract the next wave of AI developers from the country and beyond. Microsoft's Jay Parikh also told us that India's developer community is a key investment area as the country raced past the United States to become the largest source of open-source contributors on GitHub 15. AI rewrites the operating model of Indian IT A quiet rewrite, not a sudden break. What looks like incremental change across quarterly updates is, in fact, a structural shift in how Indian IT operates. For decades, growth followed a simple formula: hire more people, add delivery layers, and scale revenue. That people-led engine built global champions but is now being dismantled Over the last few quarters, large IT firms have begun operating differently. AI, automation, and platform-led delivery are replacing headcount expansion as the primary drivers of scale. Executives now speak of productivity gains, AI factories, and agentic systems rather than fresher hiring or bench growth The takeaway: Indian IT is no longer optimising for size. It is optimising for output, with intelligence as the new production layer. 16: Back office renaissance A quiet reversal is underway. Once seen as labour-heavy cousins of IT services, BPM firms are now emerging as AI-led technology operators. Integrated technology operations, long dominated by IT firms, are increasingly being executed by BPM-origin players such as Genpact, EXL, and Firstsource Solutions Over the past four quarters, AI and agentic automation embedded directly into workflows have driven faster growth, rising technology-led revenues, and stronger investor confidence compared with many IT peers. The takeaway: By sitting closest to day-to-day operations, BPMs are turning AI into revenue faster than traditional IT services firms 17. AI-fueled crypto rally gets reality check In a world going gaga over memecoins and Dogecoin ETFs, talking about fundamentals and AI-blockchain integration can make a crypto investor feel smarter than others – only it’s still more vibes than value. Unlike memecoins, AI tokens are backed by real use cases, integrating machine learning and automation within decentralised ecosystems NEAR, ICP, FET, TAO, and Render are some of the popular AI tokens But, as we close 2025, investors are watching out for use cases that would scale; projects with clear utility and strong technology to hold ground. Others are expected to fade away. We take a closer look here Was this newsletter forwarded to you? You can sign up for the AI Edge here
December 27, 2025
Why Indian brokerages are teaching AI to read the markets, but won’t let it trade
For years, India’s broking apps have looked different, but they have worked the same way. Dashboards, filters, charts and analyst notes guided investors through decisions. Artificial intelligence is now beginning to rewrite that flow. Across platforms, AI is no longer just a backend efficiency tool. It is moving closer to how investors think, search and act. A quiet shift: The first signs of AI in broking are easy to miss. There are no auto-trading bots making stock calls. Instead, firms are embedding AI internally to scale intelligence. At Angel One, group CEO Ambarish Kenghe describes AI as a long-term capability, not a product feature. “There was nothing broken that needed fixing,” he said of his early days at the company. The mandate, he adds, was to think a decade ahead. That thinking has translated into in-house AI systems for customer support, automated email responses and even internal multilingual podcasts. “AI democratises intelligence,” Kenghe said, comparing it to calculators and search engines that expanded access to knowledge. Why brokerages want their own AI: As retail investors increasingly upload portfolios to tools like ChatGPT or Gemini, brokerages see a risk. General-purpose models lack market context and often work with incomplete data. That concern is pushing firms toward vertical AI built specifically for Indian markets. Dhan’s parent, Raise Financial Services, is betting on this with Fuzz, an agentic AI model trained on India-specific datasets. “This is meant for serious investors and analysts,” founder Pravin Jadhav has said, stressing that user data stays within the country. Behind the scenes, Raise already uses AI to summarise over 1,000 news items daily and handle millions of customer interactions. When AI replaces the dashboard: A deeper shift is underway in how investors interact with apps. Model Context Protocol, or MCP, allows AI agents to securely connect to brokerage systems Zerodha has embraced this by opening its systems via MCP, letting users analyse portfolios using third-party AI assistants instead of built-in dashboards. “AI tools have become so good that you don’t need a UI anymore,” CEO Nithin Kamath wrote recently, sharing early user feedback. Holding the line on advice: Across platforms, one theme recurs. AI’s capabilities are advancing faster than regulatory clarity. Under current rules, AI systems cannot legally provide direct investment advice to retail investors without proper licensing and safeguards. SEBI has shown openness to consultation, but explainability remains a challenge Large models are probabilistic, not deterministic, and cannot always articulate why a particular conclusion was reached. In financial markets, that opacity matters. For now, AI can analyse, summarise and personalise, but it cannot decide. How long that line holds will shape the next phase of India’s broking industry. Check out the full story Was this newsletter forwarded to you? You can sign up for the AI Edge here
December 20, 2025
Satya Nadella’s 3-city India tour shows how AI is becoming a national project
Here is the thing about Microsoft CEO Satya Nadella’s India visit. It was not a corporate roadshow but was a coordinated pitch across governance, engineering and enterprise, crafted to tap into India’s AI ambitions at a moment when the country is emerging as a strategic counterweight in global tech. Three cities, three narratives, and one message: India can move faster than any other market if it chooses to. A tour designed around India’s AI map: Delhi was the language of sovereignty and national capacity. Bengaluru was about software architecture and developer ecosystems. Mumbai was the hard business pitch, where Nadella called data the most strategic asset and showcased real deployments like MahaCrimeOS, now running in 23 police stations and scaling to 1,100. Each stop reinforced the same thesis that India is not just a market but a full-stack AI economy in the making The geopolitical backdrop is impossible to ignore: Google’s $15 billion pledge and Amazon’s $35 billion commitment have turned India into a high-velocity AI battleground. Nadella’s hype about India winning the AI race positions the country as a credible alternative to China A McKinsey report estimates that AI could lift India’s GDP by 15 to 20% and generate millions of jobs. And for everyday users, this means cheaper AI tools in education, healthcare, and skilling: that is the layer Microsoft wants to power. In the national capital…: Nadella unveiled a stack built on sovereign cloud options, in-country data processing and contextual AI. The framing was deliberate: Not Microsoft’s Copilot but India’s Copilot On cyber, his message was blunt. “When it comes to cybersecurity, it is an intelligence game.” India needs digital sovereignty, but cannot fight threats without global intelligence. Microsoft is already rolling out in-country processing for Microsoft 365 Copilot in India, Japan, Australia and the UK, with a 15-country expansion planned for 2026. In India’s tech capital…: Nadella shifted to developers. The pitch was an AI-driven software development lifecycle where engineering begins with evaluation and orchestration, not line-by-line coding Its Foundry hosts more than 11,000 models, GitHub is becoming an agent workspace, and Copilot Studio is the design layer for building agents with prompts rather than code. The message, again, was clear: This is the new production layer of software And in the financial capital…: In the final leg, Nadella told India’s largest conglomerates that their most valuable asset is the data already inside their walls. The knowledge of people, relationships, documents, conversations, and workflows is what will determine the quality of future AI. “Models are becoming a commodity,” he said, adding that performance will be a direct function of data maturity. Skills and scale: Microsoft will train 20 million Indians in AI by 2030. More than 5.6 million have already been trained since January 2025. This is not just skilling but economic mobility embedded into public platforms like e-Shram and the National Career Service, which serve over 31 crore informal workers. That means multilingual AI interfaces will now handle job matching, resumes, and upskilling Agentic future: Across all three cities, Nadella showcased Microsoft’s agentic AI stack. At Apollo Hospitals, clinicians use agents for diagnostics. At ONGC, agents analyse upstream oil data. The shift is industry-wide. IT major Cognizant already generates 30% of its internal code with AI. Now, four IT giants, Cognizant, Infosys, TCS and Wipro, will deploy over 200,000 Copilot licenses after Nadella’s $17.5 billion investment announcement. This is how agentic AI becomes the default operating layer across Indian enterprise. The tensions behind the optimism:India’s ambitions are large, but constraints remain. Model builders, AI safety experts and domain-AI hybrids are still in short supply. Cyber vulnerabilities are rising and skilling at a national scale will need constant reinforcement. Yet Nadella’s tour made one thing clear: AI is no longer a tech upgrade in India but is becoming a structural pillar of governance, industry, and labour The bottom line: Nadella did not arrive to sell Microsoft’s roadmap but to anchor India’s. The three-city tour showed a country where AI is shifting from promise to production and where the battle for sovereignty and scale will decide the next decade of global tech leadership. Dig deeper Was this newsletter forwarded to you? You can sign up for the AI Edge here
December 13, 2025
BPM’s second act: AI boom puts EXL (and its peers) back at the center
Here is the thing about the BPM industry. For years, it sat at the periphery, dismissed as labour-heavy execution while IT services occupied the top of the value chain. Then AI entered the workflow and flipped the script The firms closest to processes, data and domain knowledge are suddenly at the centre of enterprise transformation. A middling sector is now in the middle of a renaissance. NASDAQ-listed EXL, founded in 1999, has posted double-digit growth for the last two years and has raised its 2025 revenue guidance twice. More than half of its revenue now comes from managing and analysing client data, applying analytics and embedding data into workflows. The AI boon: Rohit Kapoor, the co-founder, Chairman, and CEO of EXL, who has run this treadmill for over 26 years, describes AI as a "tailwind" that has supercharged the company's business. "It is a second leg up for the BPM industry. The business opportunity for us has exploded by more than three times," Kapoor told us in an interview from the United States last week. For the first time, a major technology shift is rewarding the people who understand how workflow actually gets done - be it in functions like underwriting insurance policies or processing claims. AI does not live only in models or platforms. It lives inside decisions, exceptions and workflows. That is the layer BPM firms have spent decades mastering. With AI amplifying that expertise, operations knowledge has become a strategic weapon. The numbers tell the story: EXL’s data and AI business has crossed 56% of revenue and is growing 17% year-on-year. It will likely hit a billion dollars this financial year. The company now expects its revenue for the year to be between $2.07 billion and $2.08 billion, implying a 13% year-over-year growth. Nearly 6,000 employees, around 10% of its workforce, are trained in AI technologies, and the company is hiring aggressively for data and engineering roles Revenue per employee is rising, as EXL is delivering double-digit growth while adding fewer people Investors have taken note. EXL’s P/E multiple is near 27, higher than Accenture and Cognizant, signalling a market premium for BPM firms that lead in data and AI. Why BPM is winning this phase of AI adoption: Kapoor describes a three-part advantage: domain knowledge from running operations, mastery of data from years of analytics work, and the ability to apply AI directly to workflows. Apart from EXL, its rivals Genpact and Firstsource invested early in analytics and now find themselves ahead as AI moves from pilots to full-scale enterprise adoption. Moreover, AI has expanded EXL’s total addressable market by more than three times as clients prioritise outcomes and business transformation over traditional IT build work. BPM firms are moving deeper into the tech stack: Kapoor said clients are now asking EXL to choose the cloud, select the algorithms, modernise the customer journey, and run the full stack with a human in the loop. That model places BPM firms squarely in territory once dominated by IT services. In Kapoor's words, "there is an overlap and we will be going into those areas." The company is also accelerating IP creation with patents focused on applied AI A fragmented market, but consolidation is coming: Capgemini’s acquisition of WNS signalled the start of a consolidation cycle. Kapoor expects more deals as AI becomes the engine for transforming legacy services firms. New players, including Thrive Holdings, are entering with an AI-first services thesis, creating a broader competitive field The bottom line: AI has shifted the centre of gravity from coding to context. BPM firms that mastered data and operations are now shaping end-to-end transformation and taking on bigger slices of the tech stack. For EXL and peers, this is not just growth. It is a second act. Read the full interview here. Was this newsletter forwarded to you? You can sign up for the AI Edge here
December 6, 2025
How Google reclaimed the AI crown
Remember when everyone thought Google had lost the AI race? Fast forward a few years, the 'code red' is over and the sleeping giant has not only woken up, but it is sprinting. As Captain Marvel once put it: "I’ve been fighting with one arm tied behind my back, but what happens when I’m finally set free?" We are witnessing the answer right now. Google has mounted a strong comeback on the back of powerful frontier models topping major AI benchmarks, products like NotebookLM and Flow, and features like Nano Banana image generation that have become the talk of the town. "Sundar Pichai's game is not about winning the first innings, it's about winning the series," said Rajan Anandan, managing director at venture capital firm Peak XV Partners. "This is a world championship team." Anandan, who led Google's business teams in India and Southeast Asia for nearly eight and half years until 2019, said large companies take time because at “Google's scale, models that hallucinate can become problematic." Gemini 3 shines big: Gemini 3, the company's newest AI model, is earning praise from rivals and tech leaders, including Elon Musk, Sam Altman, Aaron Levie, and Matt Mullenweg. Salesforce CEO Marc Benioff even said he is switching to Gemini 3 after using ChatGPT daily for three years, calling the leap “insane” and adding, “It feels like the world just changed, again." Last month, OpenAI CEO Sam Altman told employees that Google's recent progress could “create temporary economic headwinds” for the company. “I expect the vibes out there to be rough for a bit,” he said. Neil Shah, co-founder of Counterpoint Research, told us that Google "has successfully 'crossed the chasm,' overcoming the 'Innovator’s Dilemma' to leapfrog back to the front of the pack" The company also surpassed Microsoft in market cap earlier this week and is now closing in on the $4 trillion mark, a 63% jump from last year What led to Google's AI resurgence? Industry watchers and former insiders say Google’s turnaround stems from its full-stack AI strategy, long-term bets finally paying off and the increased involvement of co-founder Sergey Brin. "Google has the highest talent density on planet Earth. No one comes close. It's the only company that's integrated - from chips to models to applications. They also have one of the healthiest balance sheets, which gives them long-term orientation," Anandan said. By deeply integrating Gemini into products like Search, YouTube and Android that touch billions of users, the company is translating breakthroughs into everyday impact. The organisational overhaul: Pichai first outlined Google’s plan to become “AI-first” in 2016. But the company didn’t anticipate how ready people were to adopt generative AI technologies, something ChatGPT made clear in 2022. This kicked off a chain of events: Merging DeepMind and Google Brain into Google DeepMind, eliminating internal silos and unifying compute resources Kickstarting the Gemini project Streamlining the organisational structure to push teams to move faster Google's AI engine room: Google DeepMind was effectively transformed into the “engine room” for all of Google and Alphabet. It develops the frontier AI models that power Google’s entire product suite. AI Mode in Search now runs on Gemini 3, the first time Google has shipped Gemini in Search at launch. "When you have a full-stack approach, each layer, when it innovates, flows all the way to the top," Pichai said. Wall? What wall?: Google’s full-stack approach, combined with a new architecture, helped deliver Gemini 3’s significant gains during pre-training, surprising many AI researchers and dispelling concerns that AI scaling had hit a wall. "If you were on the outside, it looked like we were quiet or we were behind, but we were putting all the building blocks in place and then executing on top of it," Pichai said. Gemini as unifying AI layer: Pichai envisions Gemini becoming the unified AI layer across all Google products, Search, YouTube, Cloud, and Waymo, making each better. It is also central to attracting third-party developers into Google’s ecosystem Google’s Cloud business is booming, and its TPUs are gaining momentum as a viable alternative to Nvidia’s dominance. Google recently struck a major chip deal with Anthropic and is reportedly in talks with Meta as well. OpenAI has also signed a cloud deal for ChatGPT. The last big hurdle: Enterprise adoption of Gemini, still relatively weak, is the final frontier for Google, Shah told us. Google’s open-source play is also not particularly strong at the moment, said Soham Mondal, founding partner of Triveous, a product, design, and engineering studio. While Google has pulled ahead in the hotly contested AI race right now, the real test begins now. Can it maintain this momentum, or will we see another twist in the saga? Something to watch out for! Read the full story Bonus: Check out The Thinking Game, a documentary that delves into the heart of Google DeepMind, following Demis Hassabis and his team as they strive to unravel the mysteries of artificial general intelligence (AGI). Was this newsletter forwarded to you? You can sign up for the AI Edge here
November 29, 2025

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